Glossary of common billing and insurance terms

Billing Statement

Summary activity regarding charges and payments related to a particular account or group of accounts.

Claim

The information billed to the insurance company for services provided.

Contractual Allowance (insurance discount)

The difference between the insurance contracted amount and the amount of total charges.

Co-insurance

A percentage of allowable charges for which you are responsible as determined by your medical insurance policy.

Co-payment

A set fee for a particular service as determined by your medical insurance policy

Deductible

The amount that the patient or family must pay for health-care services before the insurance policy begins making payments. The health insurance policy sets this amount; usually it is due every calendar year.

Denial (denied charge)

A charge that your insurance will not pay. This can be due because you used an out of network provider, you didn't have prior authorization or your insurance company decided the charge was not medically necessary. You may or may not be responsible for this charge. Your EOB will give you this information

EOB (Explanation of Benefits)

A detailed explanation of coverage from your health insurance company for the medical services provided.

Financial Assistance

Adjustments made to the amount owed by a patient to the hospital. These adjustments are based on financial assistance applications and established financial guidelines.

Guarantor

The person responsible for paying the bill.

Liability Insurance

Another type of insurance that may pay your medical bills. Examples include auto insurance or home owners insurance.

Non-Covered Charge

A charge that is not covered by your health insurance plan. You are generally responsible for these types of services. Cosmetic surgery is a common example.

Out-of-Pocket Maximum

An out-of-pocket maximum is a cap on how much you have to pay for your family's covered medical expenses in a calendar year. After you reach the out-of-pocket maximum, the plan pays 100% of all remaining covered expenses for that year.

Out-of-Network

A hospital or physician that has not contracted with your specific health insurance plan. There may be additional costs to you for using one of these health care providers.

Payor

A third party entity (commercial or government) that pays medical claims.

Prior Authorization / Precertification

A formal approval obtained from the insurance company prior to delivery of medical services. Many insurance companies require prior authorization or precertification for specific medical services.

Subscriber

The person who holds and / or is responsible for the medical insurance policy.